ASSET VALUATION (HẰNG - KHÁNH)

1. What role does asset valuation play in financial management?

a. Calculating marketing expenses
b. Determining employee salaries
c. Understanding the worth of a company’s assets
d. Assessing customer satisfaction
2. What does the cost approach to asset valuation involve?
a. Estimating future cash flows
b. Determining the cost to replace or reproduce the asset
c. Comparing to similar assets in the market
d. Using recent sales of similar assets
3. What does the market approach to asset valuation involve?
a. Estimating future cash flows.
b. Determining the cost to replace or reproduce the asset.
c. Comparing to similar assets in the market.
d. Using recent sales of similar assets.
4. Why is it important for companies to regularly reassess their asset valuations?
a. To increase taxes
b. To decrease liabilities
c. To ensure accuracy and keep valuations up to date
d. To attract investors
5. What are some factors that can influence asset valuation?
a. Because it involves different analysts with different assumptions.
b. Because it is based on market trends only.
c. Because it is always accurate.
d. Because it is an exact science.
6. What is asset valuation?
a. Ignoring the value of assets.
b. Determining the worth of an asset or group of assets.
c. Buying assets at a discount price.
d. Selling assets at a premium price.
7. Can you explain THE MARKET APPROACH to asset valuation with an
example?
a. Ignoring market trends.
b. Estimating replacement cost of an asset.
c. Looking at similar asset prices in the market.
d. Estimating future income of an asset.
8. Can you explain THE COST APPROACH to asset valuation with an example?
a. Looking at similar asset prices in the market.
b. Estimating future income of an asset.
c. Estimating replacement cost of an asset.
d. Ignoring market trends.
9. Can you explain THE INCOME APPROACH to asset valuation with an
example?
a. Ignoring market trends.
b. Looking at similar asset prices in the market.
c. Estimating replacement cost of an asset.
d. Estimating future income of an asset.
10. Which method is often used to value income-producing assets such as rental
properties?
a. Discounted cash flow approach.
b. Market approach
c. Income approach
d. Cost approach
11. Which method involves estimating the future cash flows that an asset is expected
to generate?
a. Market approach
b. Income approach
c. Cost approach
d. Discounted cash flow approach
12. Which method involves estimating the future income the asset is expected to
generate and then discounting that income to its present value?
a. Random approach
b. Cost approach
c. Income approach
 d. Market approach

13. Which method involves estimating the cost of replacing the asset with a similar
one?
a. Random approach
b. Cost approach
c. Market approach
d. Income approach
14. Which method involves looking at the prices of similar assets in the market to
estimate the value of the asset in question?
a. Market approach
b. Income approach
c. Cost approach
d. Random approach
15. Why is asset valuation important in financial analysis and investment decision-
making?
a. To overestimate the value of assets.
b. To complicate investment decisions.
c. To understand the value of holdings.
d. To ignore the worth of assets.
16. What factors should be considered in asset valuation?
a. Market conditions and economic trends.
b. Only the cost of the asset.
c. Ignoring all external factors.
d. Subjective opinions of analysts.
17. Which is asset valuation considered subjective?
a. Because it involves different analysts with different assumptions.
b. Because it is based on market trends only.
c. Because it is always accurate.
d. Because it is an exact science.
18. What does the term "sales comparison" refer to the context of asset valuation?
a. Comparable assets that have been recently sold in the market
b. The market value of the asset is determined by a professional appraiser
c. The replacement cost of the asset
 d. The original purchase price of the asset

19. The book value of an asset is equal to the:

a. Asset's cost less accumulated depreciation
b. Asset's fair value less its historical cost
c. Replacement cost of the asset
d. Blue book value relied on by secondary markets
20. Which factor would negatively influence demand in real estate?
a. Low liquidity
b. Potential of capital appreciation
c. Redevelopment potential of the property
d. Regular income
21. When using the cost method for valuation, what aspect of the asset is primarily
considered?
a. Current market demand
b. Economic obsolescence
c. Historical cost
d. Future potential income
22. In the context of valuation, what does "obsolescence" refer to:
a. The market demand for similar asset
b. The process of asset depreciation
c. The age of the asset
d. The loss in the value due to technological advancement
23. The actual survival life of the building before it collapses is called the ______
a. residual life
b. useful life
c. physical life
d. economic life
24. The total area of floor in - between walls consists of the floor of all rooms,
corridors, stair cases, WC, wall thicknesses and external projections ___ is
known as:
a. NIA
b. FAR
c. GEA
 d. GIA

25. Which of the following factors is typically considered when estimating the
remaining useful life of the asset?
a. The historical cost of the asset
b. The original purchase price of the asset
c. Market demand for similar assets
d. The age of the asset
26. Which of the following valuation methods considers the future income generated
by the asset?
a. Market value approach
b. Replacement cost method
c. Income method
d. Sales comparison method
27. The value at the end of the utility period without being dismantled is termed as:
a. Scrap value
b. Market value
c. Book value
d. Salvage value
28. What does the term "scrap value" refer to in the context of asset valuation?
a. The original purchase price of the asset
b. The value of the assets is recorded on the company's balance sheet
c. The amount received from selling the asset at the end of its useful life
d. The market value of the asset
29. Real estate has some _______ and, therefore, has a value
a. immobility
b. profit
c. use
d. characteristics of non - marketable and non- - investment property
30. Which of the following factors is NOT typically considered in the income method
of valuation?
a. Market demand for similar assets
b. Future cash flows generated by the asset
c. Risk associated with the asset
 d. A discounted rate is used to calculate the present value

31. What does the term "appraisal" refer to in the context of asset valuation?
a. The process of disposing of an asset
b. The process of assessing the market value of an asset
c. The process of calculating depreciation expenses
d. The process of determining the original purchase price of an asset
32. When using the income method for asset valuation, what discount rate is
typically applied to future cash flows?
a. Inflation rate
b. Market interest rate
c. Tax rate
d. Discount rate reflecting the risk associated with the asse
33. In relation to a lease agreement, the actual rent specified in the lease is
called______
a. contractual rent
b. effective rent
c. negotiated rent
d. standard rent
34. Which the following method is used to estimate the market value of the asset
based on the price at which similar assets have been sold in the market?
a. Replacement cost method
b. Reproduction cost method
c. Income method
d. Market method
35. The proposed development of Metrorail station in the city creates an increase in
real estate demand in the surrounding area. According to the principle of
Demand, Supply, and Desire:
a. The home values and rents will go down.
b. The home values and rents will go up.
c. The home values and rents will not change.
d. Building construction costs will increase.
36. Which one of the following is NOT a characteristic of real estate market?
a. No free flow of information
b. It is imperfect market
c. It is perfect investment market
d. Heterogeneity
37. Under rent capitalization method, the value of the property increases
with_______
a. higher property tax
b. higher capitalization rate
c. lower capitalization rate
d. longer duration
38. In the cost method, what adjustments is typically made to the historical cost of
the asset?
a. Adjustments for market demand
b. Adjustments for inflation
c. Adjustments for functional obsolescence
d. Adjustments for financial conditions
39. In the context of asset valuation, what does the term "fair market value" mean:
a. The value of the asset as determined by an independent appraiser.
b. The value of the asset as recorded on the company's balance sheet.
c. The price at which the asset could be sold in an open market transaction
between willing parties.
d. The original purchase price of the asset.
40. Fair market value is the amount at which property would change hands between
a willing seller and a willing buyer when neither is acting under _________ and
when both have reasonable knowledge of the relevant facts.
a. requirement
b. compulsion
c. contract
d. relationship
41. Which the following statements is true regarding the market value method of
valuation?
a. It considered only original purchase price of the asset.
b. It reflect the price at which the asset can be sold in the current market.
c. It does not considered any external factors influencing value.
d. It primary used for tax purposes.
42. Depreciated Replacement Cost is:
a. equal to the reproduction cost
b. usually more than the reproduction cost
c. usually smaller than the reproduction cost
d. all the above are true
43. Which of the following transaction is an arm's length transaction?
a. Transaction between parent and subsidiary companies
b. Transaction between parties at the auction sale.
c. Transaction between a landlord and a tenant
d. Transaction between two brothers
44. Technological assets become obsolete so fast that their _________ is often
shortened.
a. economic life
b. physical life
c. internal obsolescence
d. physical depreciation
45. Which of the following best describes the replacement value of a business?
a. The value if sold off piece-meal
b. The value to replace assets with new
c. The cost of setting up an equivalent venture
d. The Net present value of current operations
46. Depreciation resulting from outmoded design is classed as ____________
a. Physical deteriation
b. Functional obsolescence
c. External obsolescence
d. Economic obsolescence
47. The deteriation resulting from the closing of a large business in a small town is
classed as:
a. Physical deteriation
b. Funtional obsolescence
c. Internal obsolescence
d. Economic obsolescence
48. Which the following valuation methods considers the future income generated by
the asset?
a. Market value approach
b. Sales comparison method
c. Income method
d. Replacement cost method
49. When valuing plant, which of the following is NOT typically considered a factor
influencing value?
a. Functional obsolescence
b. Economic obsolescence
c. Historical cost
d. External obsolescence
50. Which of the following valuation methods takes into account the cost of replacing
the asset with a similar one?
a. Market value approach
b. Sales comparison method
c. Income method
d. Replacement cost method
51. The factors that influence real property values include
a. Environmental factors.
b. Economic factors.
c. Governmental controls.
d. All of the above
52. While carrying out valuation of property for bank finance, which of the
following is not to be taken into consideration?
a. Age of the building
b. Rent fetching capacity of the property
c. Economic obsolescence
d. Amount of loan
53. Which among the following is NOT a factor affecting market rent?
a. City
b. Location
c. Type of building
d. Turnover of the lessee
54. Market approach basically operates on the ______ .
a. principle of increasing and decreasing returns
b. principle of substitution
c. principle of conformity
d. principle of contribution
55. The asset valuation is:
a. A science
b. An art
c. (a) and (b) are true
d. (a) and (b) are false
56. Which the following method for asset valuation focus on estimating the cost to
replace the asset with a similar one?
a. Reproduction cos method
b. Replacement cost method
c. Income method
d. Market method
57. Which the following factors is NOT typically considered in the discounted cash
flow method of valuation?
a. Future maintenance cost
b. The historical cost of the asset
c. Future cash flows generated by the asset
d. Discount rate
58. Which the following factors is NOT a reason why plant and machinery may
become obsolete?
a. Changes in industry standards.
b. Wear and tear
c. Advances in technology
d. Changes in government regulations
59. Which of the following factors is NOT typically considered in the replacement
cost method of valuation?
a. Salvage value
b. Market demand for similar asset
c. Technical specifications of the asset
d. The capacity of the asset
60. Which depreciation method assumes that asset depreciate at a constant rate over
their useful life?
a. Straight – line depreciation method
b. Double – declining balance method
c. Unit of production method
d. Some – of – the – years – digits method
61. Which of the following method is commonly used for valuation of plant and
machinery?
a. Straight – line depreciation method
b. Double – declining balance method
c. Replacement cost method
d. Reproduction cost method
62. Which one of the following valuation methodology is most appropriate for
valuing a non – income generating residential bungalow?
a. Discounted Cash Flow Method
b. Sales Comparable & Depreciated Replacement Cost Method
c. Income Method
d. Direct Capitalization Method